BRUSSELS – Microsoft (NASDAQ: MSFT) faces a hefty antitrust fine after the European Commission on Tuesday accused it of illegally linking its chat and video app Teams with its Office product, giving it an unfair advantage over rivals such as Slack.
Eleven years after Microsoft’s last EU fine, the EU competition watchdog’s latest action was triggered by a 2020 complaint from rival workspace messaging app Slack, owned by Salesforce.
Reuters first reported in April that the EU was preparing the charges.
The European Commission, acting as the EU competition watchdog, said Teams received a distribution advantage while limitations preventing interaction between Teams’ competitors and Microsoft’s offerings further hindered rivals.
“Preserving competition for remote communication and collaboration tools is essential as it also fosters innovation on these markets,” EU antitrust chief Margrethe Vestager said in a statement.
Over the last decade, the U.S. tech giant has paid 2.2 billion euros ($2.4 billion) in EU antitrust fines for bundling multiple products and other violations. It risks a fine of as much as 10% of its global annual turnover if it’s found guilty of the latest alleged antitrust breaches.
The Commission said Microsoft’s actions were inadequate in addressing its concerns, emphasizing the need for further changes to restore competition.
The EU enforcer wants the company to sell Office without Teams at a lower price than what it has announced, people with direct knowledge of the matter said, while rivals want clearer interoperability terms and more incentives for users to switch to them.
Microsoft President Brad Smith reiterated comments made earlier this month about the company’s willingness to resolve the issue.
“Having unbundled Teams and taken initial interoperability steps, we appreciate the additional clarity provided today and will work to find solutions to address the Commission’s remaining concerns,” Smith said.
Salesforce President and Chief Legal Officer Sabastian Niles urged the Commission to move towards a swift, binding, and effective remedy to restore a free and fair choice.
German rival and complainant Alfaview also welcomed the Commission’s charge against Microsoft.
Teams was added to Office 365 in 2017 for free and subsequently replaced Skype for Business. Its popularity surged during the pandemic thanks to its video conferencing feature, though competitors argued that Microsoft gained an unfair advantage by bundling these products together.
In April, Microsoft globally separated Teams from Office to address EU antitrust concerns and facilitate easier integration for competitors with its products. However, sources indicated that this unbundling is unlikely to satisfy regulators.
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(Source: Reuters)
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